Micron: Fiscal 3Q11 Financial Results

Micron Technology, Inc. announced results of operations for its third quarter of fiscal 2011, which ended June 2, 2011.

For the third quarter, the company had net income attributable to Micron shareholders of $75 million, or $0.07 per diluted share, on net sales of $2.1 billion.

The company’s consolidated gross margin improved to 22 percent for the third quarter of fiscal 2011 from 19 percent for the second quarter of fiscal 2011 due primarily to decreases in manufacturing costs. Revenue from sales of DRAM products was 7 percent lower in the third quarter of fiscal 2011 compared to the second quarter of fiscal 2011 due to a decrease in sales volume. Revenue from sales of NAND Flash products was 5 percent lower in the third quarter of fiscal 2011 compared to the second quarter of fiscal 2011 due to a 5 percent decrease in average selling prices. Sales of NOR Flash products were approximately 17 percent of total net sales for the third quarter of fiscal 2011.

Cash flows from operations for the third quarter of fiscal 2011 were $589 million. During the third quarter of fiscal 2011, the company invested $534 million in capital expenditures. In addition, during the third quarter, the company paid down $327 million of debt and ended the quarter with cash and short-term investments of $2.4 billion.

During the third quarter of fiscal 2011, the company completed the sale of its wafer fabrication facility in Japan to Tower Semiconductor Ltd. (TowerJazz). In connection therewith, the company entered into a supply agreement with TowerJazz to manufacture products for the company in the Japan facility for approximately three years. Other operating income in the third quarter of fiscal 2011 included a $54 million gain from the sale. In addition, income tax provision in the third quarter of fiscal 2011 included a charge of $74 million to write down certain tax assets as a result of the transaction.

In the first quarter of fiscal 2011, the company entered into a 10-year patent cross-license agreement with Samsung Electronics Co. Ltd. Under the agreement, Samsung agreed to pay the company $275 million, of which the company received $200 million, $40 million and $35 million in the first, second and third quarters, respectively, of fiscal 2011. The license is a life-of-patents license for existing patents and applications, and a 10-year term license for all other patents.

Other operating income in the third quarter of fiscal 2011 also included $8 million of receipts from the U.S. government in connection with anti-dumping tariffs. Other operating income in the third quarter and first nine months of fiscal 2010 includes $16 million and $24 million, respectively, of grant income related to the company’s operations in China. Other operating income in the first nine months of fiscal 2010 included $11 million of receipts from the U.S. government in connection with anti-dumping tariffs.